The college tuition tax credit that has held up passage of the Social Security bill is a major piece of legislation in its own right, equivalent to a 15 per cent increase in federal aid to higher education, which totaled $9.5 billion last fiscal year.

Measured another way, the $250-per-student credit or income tax cut would cost the Treasury half as much as the government spent in fiscal 1977 assisting students directly through grants, scholarships, subsidized loans and other tuition support programs. That student assistance outlay was $2.4 billion.

Experts say most of the dollar benefit from the proposed $1.2 billion-a-year college credit would go to taxpayers in middle- and upper-income brackets.

This middle-class flavor is one of the virtues of the provision, according to its sponsors. But critics argue that federal aid to education should be aimed toward those at lower-income levels.

Moreover, the critics argue, financially hard-pressed colleees are bound to succumb to the temptation to raise tuition to capitalize on the tax credits, thereby transforming the legislation from aid to parents to aid to institutions.

The tuition credit has become so controversial that conferees were on the verge of breaking up without clearing the $227 billion Social Security bill, to which the cridit was attached by the Senate.

As in most heated debates over economic issues, contradictory cost estimates have been raised by proponents and opponents of the tax credit.

Taxation With Representation, a liberal tax "reform" group based in Washington, claims that only 6 per cent of the bill's value would go to families, with incomes under $9,000 a year and that 78 per cent would go to those with incomes exceeding $20,000. Its source for these figures was the Congressional Budget Office, it said.

However, Sen. William V. Roth (R-Del.) said the figures were misleading.

Roth, leading sponsor of the credit, provided through his staff an American Council on Education (ACE) study that showed that 32 per cent of the dollar value of the tax credit would go to families earning up to $10,000 annually and 56.6 per cent would go to those earning $10,000 to $25,000, according to the study.

The ACE, which represents 1,500 private and public colleges, is one of several higher-education associations that recently switched to a neutral position on the tuition tax credit after years of opposing it. The 325-member American Association of Colleges and Universities reportedly adopted a similar position.

Bruce E. Thompson, legislative assistant to Roth, said yesterday the popularity of the tax credit has been shown by a steadily increasing volume of mail from parents who complain they are squeezed by rising living costs and higher taxes in the middle-income bracket.

Thompson denied that the tax credit would result in tuition increases, saying, "Our studies show that for every $100 tuition increase, colleges project a 1-to-3 per cent drop in enrollment. Why would they finlict that on themselves?"

However, Thomas Field of Taxation With Representation said the bill would stimulate tension between public universities, whose lower tuition would be eased significantly, and private colleges, whose tuition costs of $4,700 or more a year per student would overwhelm any benefit of the $250 credit.

The $1.2 billion annual federal "expenditure," Field argued, would he better put to use as a subsidy of direct grants or scholarships based on merit or need.